Debit purchasing of stored value card for use by and/or delivery to others

ABSTRACT

A method of issuing a purchase card is provided. The method includes the steps of presenting a purchaser with the opportunity to buy the purchase card, determining whether the purchaser has sufficient funds to pay for the purchase card, creating a purchase card account for a recipient designated by the purchaser, and issuing the purchase card. The purchase card may also be issued in connection with another credit card, for example as a rebate for purchases on the credit card. The purchase card may also be converted to a credit card.

FIELD OF THE INVENTION

This invention relates to a system for purchasing or transferring ofstored value or debit purchasing cards, which can be pre-arranged to begiven as a gift to a designated recipient.

BACKGROUND OF THE INVENTION

On many occasions, consumers, other bank customers, credit card holders,and other persons find it is desirable to arrange for another person,perhaps a relative, to have access to a specified sum of money. Forexample, a parent might want to arrange for a child to have access tomoney when the child is taking a trip or going away to college. One mayalso find it desirable to mail a gift to another person who isgeographically distant. In these and other cases, it is oftenundesirable to give away or send cash. If lost or stolen, cash ispractically unrecoverable. Traveler's checks are also undesirable asthey must be purchased at a bank and are not acceptable for many typesof purchases. Gift certificates are also undesirable because theyrequire the recipient to purchase from the merchant that issued the giftcertificate. These and other drawbacks exist to the aforementionedalternatives.

SUMMARY OF THE INVENTION

An object of the invention is to overcome these and other drawbacks inexisting purchase schemes.

Another object of the invention is to provide a method for issuing apurchase card comprising: presenting a purchaser with the opportunity tobuy the purchase card, determining whether the purchaser has sufficientfunds to pay for the purchase card, creating a purchase card account fora recipient designated by the purchaser; and issuing the purchase card.

A further object of the invention is to provide a purchase card wherethe recipient activates the purchase card.

A further object of the invention is to provide a purchase card wherethe purchase card account contains a monetary amount determined by thepurchaser of the purchase card.

A further object of the invention is to provide a purchase card wheremoney can be added to the balance of an issued purchase card account.

A further object of the invention is to provide a purchase card wherethe purchase card is activated when the issuer of the purchase card isnotified that the recipient has received the purchase card.

A further object of the invention is to provide a purchase card wherethe issuer of the purchase card notifies the purchaser that therecipient has received the purchase card.

A further object of the invention is to provide a purchase card wherethe purchaser may designate with which merchants the purchase card maybe used.

A further object of the invention is to provide a purchase card wherethe purchase card is activated for a predetermined period of time.

Another object is to provide a method for issuing a purchase card as arebate award comprising: issuing a credit card to a cardholder, saidcredit card being associated with a sponsor, calculating a rebate amountbased upon cardholder purchases made with said credit card, issuing apurchase card to a cardholder or to a recipient designated by saidcardholder, said purchase card having a purchase value determined bysaid rebate amount.

A further object of the invention is to provide a purchase card wherethe recipient of the purchase card activates the card.

A further object of the invention is to provide a purchase card wherethe recipient activates the purchase card by notifying the issuer thatthe recipient has received the purchase card.

A further object of the invention is to provide a purchase card wherethe purchase card is activated for a predetermined period of time.

A further object of the invention is to provide a purchase card wherethe rebate is calculated based on all purchases made with the creditcard.

A further object of the invention is to provide a purchase card wherethe rebate is calculated based on purchase from the sponsor made withthe credit card.

A further object of the invention is to provide a purchase card wherethe sponsor notifies the issuer of the amount of rebate due a creditcard holder, and the issuer creates a purchase card in that amount.

A further object of the invention is to provide a purchase card wherethe rebate is based on the monetary value of the purchases.

Another object of the present invention is to provide a method forconverting a purchase card into a credit card comprising: creating apurchase card account for a recipient designated by the purchaser;issuing the purchase card; receiving a request from the recipient toconvert the purchase card into a credit card; determining whether therecipient meets predetermined credit criteria to convert the purchasecard into a credit card; creating a credit card account; and convertingthe purchase card into a credit card.

A further object of the invention is to provide a purchase card wherethe balance of the purchase card account is transferred to the creditcard account.

A further object of the invention is to provide a purchase card wherethe credit cards is immediately activated upon being converted from apurchase card.

Other objects and advantages exist for the present invention.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 shows a flow diagram for a portion of the purchase card system.

FIG. 2 shows a flow diagram for another portion of the purchase cardsystem.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

One embodiment of the purchase card system is shown in FIG. 1. In thisembodiment the purchase card process begins with an offer to purchase agift card at step 100. The offer may be in any suitable form that wouldnotify prospective purchasers 105 of the availability of the purchasecard. For example, a written solicitation may be mailed or otherwisedistributed to potential purchasers 105. The offer may also be in theform of oral notification, for example, a telephone call to prospectivepurchasers 105. Alternatively, the offer may be published over acomputer network, for example, on an Internet Web site. Other forms ofoffering the sale of a purchase card are also possible. In oneembodiment of the invention, offers are made to prospective purchaserswho already have a financial relationship with the offeror. Otherpotential purchasers may also be offered the opportunity to obtain apurchase card.

The offer may be accepted by a purchaser 105 by notifying a customerservice center 110. The acceptance may be in any form acceptable to thecustomer service center 110. For example, the purchaser may mail, fax,or otherwise transmit a written acceptance, telephone an acceptance, orelectronically transmit, for example, via Web Site, an acceptance bycomputer or other suitable device. At step 120, the customer servicecenter 110 receives pertinent information to identify the purchaser 105and the purchaser's desired spending limit for the purchase card. Forexample, the customer service center may identify the purchaser 105 byname, address, credit card account number, social security number, otherunique identifiers or a combination of identifiers.

At step 130, the customer service center 120 is checked to verify thatthe caller or purchaser was included in the solicitations for thisprogram. If the caller or purchaser was not originally solicited,customer service 120 determines whether to extend an offer in step 135.

If the caller or purchaser was solicited 130, certain purchaser 105information may be accessed at 140. If, for example, the purchaserwishes to pay for the purchase card with a credit card, the purchaser'scredit card account information may be accessed. For example, thepurchaser's available credit limit may be accessed at 145 to verify thatsufficient credit is available to cover the spending amount of thepurchase card. If the available credit is insufficient, the purchaser105 may be so informed at 150. The purchaser 105 may be given theopportunity to modify the purchase card spending amount, at 155, inorder to ensure that the purchase amount does not exceed the availablecredit.

The process may terminate at 160 if, for example, the purchaser 105 doesnot wish to modify the purchase amount.

After it has been determined that the purchaser's available credit issufficient, a transaction may be posted to the purchaser's credit cardfor the amount of the purchase at 170. In another embodiment of thepresent invention, a purchaser may use a check, cash, or other financialmethods to obtain a purchase card. Regardless of the purchasing method,the issuer of the purchase card must determine whether the purchaser hassufficient funds to purchase the card.

When the purchase card is paid for by credit or bank account, thepurchaser's account balance is updated at 175 to reflect the purchase.The account balance information, as well as information identifying thepurchaser 105 and the recipient, may be stored in a retrievable andaccessible fashion. For example, the information may be stored incomputer database 180. After the purchaser 105 has paid (or authorizedpayment) for the purchase card, and it is posted to a credit cardaccount, the acceptance process is complete and the acceptance processterminates at 160.

An account for the purchase card is created at 190. This may beperformed by a third party processor that establishes and managespurchase card accounts, for example, at 200. Creation of the purchasecard account may comprise various actions, such as, recording therecipients 215 name, address and phone number, imprinting a card with anaccount number, a recipient name and an expiration date, encoding thecard to record the purchase value stored thereon, and other actions,such as, for example, preparing account fulfillment documents (e.g. cardcarrier activation, etc.).

When the purchase card account is complete, the card is delivered. Inone embodiment of the invention, card may be affiliated with aparticular network, such a credit network, or debit network. Forexample, a card may be affiliated with the VISA® network. The deliverymay be to the purchaser 105 or to the recipient 215, as shown at 210.The place of delivery may be arranged during the initial purchase of thecard or other suitable time before delivery.

Information regarding an account is sent to account file 220, where anaccount can be monitored. In one embodiment, account file 220 allowsmonitoring of the current balance of an account, any activity in theaccount, including debits and credits, transaction updates, and thelike. Other information about an account, such as purchase disputeresolutions, the history provided by the customer, and account status,may also be monitored.

Before the purchase card can be used to make purchases, it must beactivated as shown in FIG. 2 at 230. Activation may be accomplished inany suitable manner. For example, the recipient 215 of the card mayplace a telephone call to an activation center 240. Activation center240 may act as a telemarketing vendor by verifying information about therecipient (i.e. name, address, telephone number, etc.) before thepurchase card is activated. The activation center 240 may then transmitthe data about the recipient to Data Service 200 to activate thepurchase card for use. Activation center 240 may also modify informationabout a recipient, such as, for example, a change of address. Otherforms of activation, such as by computer network may also be used.

During activation certain verifications may be made at 250 to ensurethat the intended recipient 215 is the person attempting to activate thepurchase card. These security checks 250 may entail questions aboutpersonal information (e.g., name, address, telephone number, etc.) ormay utilize other well known methods of authenticating the recipient215. If the person attempting to activate the purchase card does notpass the security check 250, the purchase card will be denied activationat 255 and the activation process may terminate at 260. If the personattempting to activate the purchase card passes the security check 250,they may be prompted at 252 for more information. The information may beused for subsequent security checks, should they be required, or toverify or complete the purchase card account information.

After activation the purchase card is ready for use. In some embodimentsof the invention the activation process will end at this point. Therecipient 215 may now use the purchase card to make purchases whereever, for example, VISA® cards are accepted. Each time a purchase ismade using the card, the amount of the purchase will be debited from thecard's available balance. The purchase card will continue to operate aslong as a positive balance remains on the card. Some embodiments of thepurchase card may have the capacity to have additional purchase valueadded to them after they have been activated.

If the recipient of a purchase card is someone other than the purchaser,the issuer of the card may notify the purchaser regarding variousaspects of the card. For example, in one embodiment of the invention,the issuer could notify the purchaser that the purchase card has beenreceived and activated by the intended recipient. An issuer may alsonotify a purchaser where the purchase card is being used, or whatproducts are being purchased with the purchase card.

Some embodiments of the purchase card will include an expiration date.After the expiration date has passed the purchase card will bede-activated and cease to operate. In another embodiment of the presentinvention, a recipient or a purchaser of a purchase card may add to thebalance of the purchase card account. This may take place in a mannersubstantially similar to the original purchasing of the purchase card.For example, a recipient of a purchase card may request that an amountbe posted to the recipient's credit card and that the same amount thenbe credited to the recipient's purchase card account. Other methods ofadding to the balance of a purchase card account may also be used.

Another embodiment of the invention allows the recipient 215 to convertthe purchase card into a credit card. Conversion may be accomplished inthe following manner. The recipient 215 calls the activation center 240to activate the purchase card and the security check 250 may beperformed in the usual manner. After passing the security check, the ageof the recipient 215 is determined at 270. If the recipient 215 is anadult (e.g., over the age of 18) an offer to convert the purchase cardinto a credit card may be extended at 271. At step 275 the recipient 215may decline the offer to convert, in which case the process mayterminate at 280. If the recipient 215 elects to convert the purchasecard to a credit card the activation center 240 may capture additionaldata 285 from recipient 215, in order to complete a credit cardapplication. At step 290 the credit card application data is forwardedto a credit decisioning office 300. The credit decisioning office 300may make inquiries to a credit bureau 305, for example, obtaining acredit report on the recipient 215. At 310 the decision is renderedwhether to approve the credit card application. If the application for acredit card is declined at 315, the recipient 215 may be notified at320. Notification may be in any suitable form, for example, a letterexplaining the declined application may be mailed at 320 to therecipient 215. Other forms of notification may also be used to notifyrecipient 215 of the declined application.

Even though the credit card application is declined at 310, the purchasecard is activated for use. At 330, the account settings allowing a cardto be used at merchants are sent to the data service 200 and the cardwill be activated as a purchase card account. Information pertaining tothe purchase card account is stored in a retrievable and accessiblemanner. For example, the purchase card account information may be storedin a computer 332.

If the decision at 310 is to accept the application for a credit card,the recipient 215 may be notified at 340. Again, notification may be inany suitable form, for example, a letter or other suitable notification.Regardless of the decision whether to convert the purchase card into acredit card, the purchase card is activated at the end of the activationcall. If the purchase card is not already active, it may be activated at345. At 350 the purchase card is converted to a credit card. The creditcard will function in a manner usual for such credit instruments. Forexample, a credit limit may be assigned, periodic account activitystatements may be generated and finance charges may be applied to anyoutstanding balance. In one embodiment, any remaining balance from thepurchase card account may be transferred and applied to the credit cardaccount. At 355 an update is sent to a retrievable data storage system,for example, computer 360. The update 355 sends credit card applicationdecisions into a database.

In another embodiment of the purchase card, a financial institution(e.g., a bank) issues a credit card to a cardholder. The card may be aco-branded card issued in cooperation with a sponsor. In thisembodiment, the sponsor offers a rebate to the cardholder based upon thedollar value amount of purchases made with the co-branded credit card.The rebate may apply to all purchases made or just to purchases madefrom the sponsor. The rebate may be calculated in a manner specified bythe terms of the cardholder agreement or other disclosures to thecardholder. In one embodiment of the invention, disclosure about therebate is provided to the cardholder in a separate form included withthe cardholder agreement. For example, the sponsor may offer a flatpercentage rebate for purchases made. In one embodiment of theinvention, the card issuer calculates the rebate due the cardholderbased on the balance paid.

In another embodiment, the sponsor notifies the financial institution ofthe amount of rebate to be awarded to the cardholder. The financialinstitution will then issue a purchase card for the amount of therebate. The purchase card may be used for purchases in the abovedescribed manner, for example, everywhere VISA® is accepted, or thepurchase card may be used for purchases solely with the sponsor or otherdesignated entities.

Other embodiments and uses of the invention will be apparent to thoseskilled in the art from consideration of the specification and practiceof the invention disclosed herein. The specification and examples shouldbe considered exemplary only. The scope of the invention is only limitedby the claims appended hereto.

1. A method for conducting a transaction using a stored value cardcomprising: creating a transaction request comprising a transactionamount and an identifier associated with a stored value card purchasedby a purchaser for a recipient, wherein the transaction request is arequest for a transaction with a merchant; transmitting the transactionrequest from the merchant to a central processor coupled to a databasethat stores a balance of the stored value card; determining whether toapprove the transaction based on whether the transaction amount exceedsthe balance; transmitting a transaction response to the merchant,wherein the transaction response approves or disapproves thetransaction; and whenever the transaction is approved, reducing thebalance stored in the database by the transaction amount.
 2. The methodof claim 1, further comprising: obtaining stored value card accountinformation and stored value card authentication information from atleast one of the purchaser and the recipient.
 3. The method of claim 1,wherein the transaction request and the transaction response aretransmitted via the Internet.
 4. The method of claim 1, wherein thebalance is stored in a stored value card account, and wherein the storedvalue card account further stores a stored value card number.
 5. Themethod of claim 1, wherein the stored value card authenticationinformation comprises at least one selected from the group consisting ofa recipient name, recipient address, and recipient communicationidentifier.
 6. A method for distributing a stored value card comprising:receiving a payment of funds from a customer, wherein the payment is forthe purchase of a stored value card by the customer; receivingauthentication information associated with the stored value card;creating a stored value card account comprising: a) a balance based on apayment of funds; b) the stored value card authentication information;and c) stored value card account information; passing stored value cardaccount creation information from a stored value card account vendingentity to a central processor; storing the balance, the stored valuecard authentication information and the stored value card accountinformation in a database; providing the stored value card to thecustomer; and activating the stored value card.
 7. The method of claim6, wherein the customer purchases and uses the card.
 8. The method ofclaim 6, wherein the customer purchases the card and designates arecipient to use the card, wherein the recipient is different from thecustomer.
 9. A system for conducting a transaction using a stored valuecard comprising: a merchant unit configured to create and transmit atransaction request comprising a transaction amount and an identifierassociated with a stored value card purchased by a purchaser for arecipient; a central processor configured to perform the followingfunctions: determine whether to approve the transaction; determinewhether the transaction amount exceeds a balance for the stored valuecard stored in the database; create and transmit a transaction response;and whenever the transaction is approved, reduce the balance in thedatabase by the transaction amount and pass transaction confirmationinformation to the merchant; and a communication link between themerchant unit and the central processor for transmitting the transactionrequest and the transaction response.
 10. A system for distributing astored value card comprising: an input device configured to receive arequest to create a stored value card account associated with a storedvalue card, wherein the request is associated with a request to purchasea stored value card by a purchaser for a recipient, wherein the storedvalue card account comprises: a) a balance based on a payment of funds,b) stored value card authentication information, and c) stored valuecard account information; a central processor configured to create anaccount for the stored value card and store the balance, the storedvalue card authentication information, and the stored value card accountinformation in a database, wherein the central processor is furtherconfigured to create and transmit an activation response; and acommunication link between the input device and the central processorconfigured to pass the request.
 11. A system for conducting atransaction using a stored value card comprising: means for creating atransaction request comprising a transaction amount and an identifierassociated with a stored value card purchased by a purchaser for arecipient, wherein the transaction request is a request for atransaction with a merchant; means for transmitting the transactionrequest from the merchant to a central processor coupled to a databasethat stores a balance of the stored value card; means for determiningwhether to approve the transaction based on whether the transactionamount exceeds the balance; means for transmitting a transactionresponse to the merchant, wherein the transaction response approves ordisapproves the transaction; and means for reducing the balance storedin the database by the transaction amount whenever the transaction isapproved.
 12. The system of claim 11, further comprising: obtainingstored value card account information and stored value cardauthentication information from at least one of the purchaser and therecipient.
 13. The system of claim 11, wherein the transaction requestand the transaction response are transmitted via the Internet.
 14. Thesystem of claim 11, wherein the balance is stored in a stored value cardaccount, and wherein the stored value card account further stores astored value card number.
 15. The system of claim 11, wherein the storedvalue card authentication information comprises at least one selectedfrom the group consisting of a recipient name, recipient address, andrecipient communication identifier.
 16. A system for distributing astored value card comprising: receiving a payment of funds from acustomer, wherein the payment is for the purchase of a stored value cardby the customer; receiving authentication information associated withthe stored value card; creating a stored value card account comprising:a) a balance based on a payment of funds; b) the stored value cardauthentication information; and c) stored value card accountinformation; passing stored value card account creation information froma stored value card account vending entity to a central processor;storing the balance, the stored value card authentication informationand the stored value card account information in a database; providingthe stored value card to the customer; and activating the stored valuecard.
 17. The system of claim 16, wherein the customer purchases anduses the card.
 18. The system of claim 16, wherein the customerpurchases the card and designates a recipient to use the card, whereinthe recipient is different from the customer.
 19. A method forconducting a transaction using a stored value card comprising: receivingfrom a merchant terminal a transaction request comprising a transactionamount and an identifier associated with a stored value card purchasedby a purchaser for a recipient; determining whether to approve thetransaction; determining whether the transaction amount exceeds abalance for the stored value card stored in the database; transmitting atransaction response via a communication link between the merchant unitand the central processor; and whenever the transaction is approved,reducing the balance in the database by the transaction amount; andpassing transaction confirmation information to the merchant.
 20. Amethod for distributing a stored value card comprising: receiving arequest to create a stored value card account associated with a storedvalue card, wherein the request is associated with a request to purchasea stored value card by a purchaser for a recipient, wherein the storedvalue card account comprises: a) a balance based on a payment of funds,b) stored value card authentication information, and c) stored valuecard account information; creating an account for the stored value cardand store the balance, the stored value card authentication information,and the stored value card account information in a database, wherein thecentral processor is further configured to create and transmit anactivation response; and receiving the request at the central processorvia a communication link between the input device and the centralprocessor.
 21. A method for conducting a transaction using a storedvalue card comprising: creating a transaction request comprising atransaction amount and an identifier associated with a stored value cardpurchased by a purchaser for a recipient, wherein the transactionrequest is a request for a transaction with a merchant; transmitting thetransaction request from the merchant to a central processor coupled toa database that stores a balance of the stored value card, wherein thebalance is stored in a stored value card account, and wherein the storedvalue card account further stores a stored value card number;determining whether to approve the transaction based on whether thetransaction amount exceeds the balance; transmitting a transactionresponse to the merchant, wherein the transaction response approves ordisapproves the transaction; and whenever the transaction is approved,reducing the balance stored in the database by the transaction amount;and obtaining stored value card account information and stored valuecard authentication information from at least one of the purchaser andthe recipient.
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